California Court of Appeal, Yaffee v. Skeen, Docket No. C097746

Hospital Lien Act (HLA)

 

Lien Upon the Damages Recovered

 

Workers’ Compensation

 

California Law

 

 

 

 

With the HLA, “the Legislature established one mechanism through which hospitals that provide emergency services can recoup costs from an entity other than a patient’s health care service plan.” (Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (2022) 77 Cal.App.5th 971, 985.) Section 3045.1 states, every person or entity “maintaining a hospital licensed under the laws of this state which furnishes emergency and ongoing medical or other services to any person injured by reason of an accident or negligent or other wrongful act not covered by workers’ compensation shall, if the person has a claim against another for damages on account of his or her injuries, have a lien upon the damages recovered, or to be recovered, by the person... to the extent of the amount of the reasonable and necessary charges of the hospital and any hospital affiliated health facility, as defined in Section 1250 of the Health and Safety Code, in which services are provided for the treatment, care, and maintenance of the person in the hospital or health facility affiliated with the hospital resulting from that accident or negligent or other wrongful act.”

 

 

When a hospital receives payment from a patient and his health insurer at a reduced negotiated rate under a prior agreement in which the hospital agreed to accept that payment as “payment in full” for its services, the hospital cannot assert a lien under the HLA to “recover the difference between its usual and customary charges and the amount received from the patient and his insurer.” (Parnell, supra, 35 Cal.4th at p. 598.) (Parnell v. Adventist Health System/West (2005) 35 Cal.4th 595, 604.) However if, “hospitals wish to preserve their right to recover the difference between usual and customary charges and the negotiated rate through a lien under the HLA, they are free to contract for this right” when negotiating their contracts with insurers. (Dameron Hospital Assn. v. AAA Northern California, Nevada & Utah Ins. Exchange (2014) 229 Cal.App.4th 549, 554.)

 

 

We agree with defendants that the plain language of section 3045.1 requires a hospital to provide emergency services before the hospital can assert a lien under the HLA, and to the extent the trial court found otherwise, it erred.

 

 

(…) Thus, the Legislature contemplated the amendments would cover nonemergency services that flow from the provision of emergency services when patients remain in the hospital.

 

 

(…) The issue in Parnell was whether a hospital could assert a lien under the HLA to recover the difference between its usual and customary charges and the amount received from a patient and its insurer when the hospital had agreed to accept the amount the patient and insurer paid as “payment in full” for its services. (Id. at p.598.) Our Supreme Court concluded the hospital could not. (Ibid.)

 

 

 

 

 

(California Court of Appeal, Dec. 17, 2024, Yaffee v. Skeen, Docket No. C097746, Certified for Publication)